Here are some U.S.companies we are actively tracking ahead of 2010 third quarter press releases. We believe they may have a good chance to eclipse analyst estimates or are about to experience an acceleration in EPS growth.
Asbury Automotive (NYSE:ABG) (see alerts) *Price: ABG $14.78
- The Industry leader
- Expected to achieve three quarters of 30% + growth of EPS.
- Revenue growth will only average about 11% in 2011
- EPS growth begins trailing off in second quarter 2011
- With revenues of ~$4 billion dollars it is outside our wheelhouse
- We are curious to see if this automobile retailer will surprise the street as economy improves
- Our fair value target if estimates are achieved- $17 to $26
Addvantage Techs Group (NASDAQ:AEY) (see alerts) *Price: $3.25
- Two back-to-back quarters of strong sales and EPS growth
- Still holding short term trading position
- Company has had sporadic EPS history
- Benefiting from cable companies initiatives to upgrade their equipment to provide HD programming. Do not know how long trend will continue.
- Weak economic conditions have caused many customers to delay plant expansions. This is a short term negative that could turn into a positive surprise as economy improves.
- Selling below book value of $3.18
Alpha Natural Resources (NYSE:ANR) (see alerts) *Price: $44.50 (Coded as a GeoSpecial @ $42.99)
- Expected to achieve six consecutive good quarters of 70% + EPS growth
- Revenue growth will average about 11%
- With revenue of ~ $4 billion dollars it is outside our wheelhouse
- We like to track this company because it has indirect exposure to China
A T Cross A (NASDAQ:ATX) *Price: $5.98
- Mundane industry
- Revenue growth will be meager at 5% for next several quarters
- Selling below book value of $6.36
- Recently raised guidance
- Buying back a significant amount of stock. Analyst estimates probably do not account for this, which could lead to upside EPS surprise.
- EPS estimates for 2011 are calling for 28% growth
Axt (NASDAQ:AXTI) (see alerts) *Price: $6.54 (Coded as a GeoSpecial @ $5.20)
- EPS growth of at least 50% for next three quarters
- Only one quarter of next six is sub par. Second quarter of 2011 is flat
- Has history of exceeding estimates
- Products are a direct beneficiary of smart phone craze.
- Outlook is strong
- Targeting high growth areas in technology sector: Wireless, fiber optic and solar industries
- Paying very little taxes
- Believe it is close to short-term fairly valued on a fully taxed basis. Long-term target $9.00
Nanometrics (NASDAQ:NANO) (see alerts) *Price: $13.01 (Coded as GeoSpecial @ $12.07)
- Has pulled back after a steady rise from when coded as a GeoSpecial at $12.07
- Products are a direct beneficiary of smart phone craze
- After third quarter, only two above average growth quarters left. Will need to report a spectacular quarter to gain momentum.
- Second quarter conference call was extremely bullish
- Agressive target- $17.00
Blonder Tongue Labs (NYSE AMEX:BDR) (see alerts) *Price: $2.35 (Coded as GeoSpecial @ $1.84)
- Company is benefiting from a transition in its business plan, where it is switching its product offering from analog to digital.
- Second quarter was break out quarter
- Momentum is expected to continue through the rest of year
- Stock is selling below book value of $3.37
- Company is not paying taxes
- Minimum short-term target of $6.00
Intest (NASDAQ:INTT) (see alerts) *Price: $3.07
- Major customers are semiconductor companies. This can lead to volatile quarters.
- After 11 straight quarters of losses the company has put together three consecutive sequentially profitable quarters in a row.
- Comments suggest that semiconductor cycle is in an uptrend.
- 2010 second quarter was a dramatic quarter. We were unable to gauge if these levels will be maintained.
- Conference call was bullish, but tempered.
- Guidance for the 2010 third quarter is wide, but still implies strong comps.
- Any talk of sustained optimism could send this stock to much higher levels.
- Not taxed
- Agressive short-term target if EPS targets are met- $6.40
Magic Software Entrs (NASDAQ:MGIC) (see alerts) *Price: $2.59
- Cloud computing
- Has experienced three consecutive quarters of dramatic EPS growth.
- No guidance
- Fourth quarter will be a tough comp.
Amtech Systems (NASDAQ:ASYS) (see alerts) *Price: $17.35 (GeoSpecial @ 11.27)
- Has pulled back after a steady rise from when coded as a GeoSpecial at $11.27.
- Second quarter was extremely bullish
- Contract backlog is at record high, given us some confidence that estimates can be exceeded.
- Three of the next 5 quarters are expected to show impressive growth. A lull is expected to occur in the second quarter of its fiscal 2011 second quarter.
- Fiscal third quarter conference call was extremely bullish.
Orbit Intl (NASDAQ:ORBT) (see alerts) *Price: $3.29
- We are still waiting for ORBT to turn the corner. Which could still be one quarter away.
- Could be a nice sleeper stock once it turns this corner
Whx Corporation (NASDAQ:WXCO) *Price: $10.37
- New on our radar due to a huge 2010 second quarter.
- We are not sure if the quarter is repeatable, since no guidance was provided and securing an interview has been difficult.
- Eager to see if 2009 third quarter financials will continue trend
- No analyst coverage
*Prices are as of business close on Friday, October 22, 2010
Disclosure: Long AEY ATX AXTI NANO BDR INTT MGIC ASYS ORBT
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